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Ensure that you are intalling the correct print driver, www.xerox.com, support section.Also check to make sure that the colour option in the printing preference is not set to Black and white or grayscale.Also ensure that you dont have any accounting option set to black and white only.

Are you printing to the printer using the Xerox Global Print Driver PCL6? If so, this will be the cause of your problem. Earlier versions of the driver werent as bad when processing PDF documents. I would suggest that you download the Workcentre 7328 PCL6 driver and try that - the problem should clear.

I don't have that manual, but similar manuals say IBT Home Sensor Error. Check your accumulator belt for damage. You may also have a dirty sensor.
The belt PN is 604K20891and is rather expensive and fragile